Joanne Segars, chief executive of the UK’s National Association of Pension Funds, is swiftly becoming one of Europe’s top pensions lobbyists too.

Joanne Seagars

That is just as well, because EU regulations are increasingly impacting UK schemes, with new solvency regulations on the horizon that could add as much as £330bn to the £1.2 trillion liabilities of the sector.

Segars has led the NAPF, Europe’s biggest pensions trade body, since 2006.

Over the course of her tenure, the profile of the organisation has risen dramatically, partly due to the growing importance of pensions to the political agenda, and also thanks to its own campaign efforts.

According to media aggregator Factiva, a sister company of Financial News, in 2012 the National Association of Pension Funds was mentioned in major national and business publications 1,152 times. In 2006, the year Segars took over, it was mentioned on 521 occasions.

Segars’ remit is also growing. In keeping with the times, she is now taking on more of a European role, having been elected the new chairman of PensionsEurope, the EU-level lobby group, in November.
This is the year the industry will learn of its fate from Brussels.

The European Commission is still publicly committed to completing a review of its main pensions law, the Institutions for Occupational Retirement Provision directive, by this summer.

One of its aims is to subject pension funds to new funding standards based on those designed for insurers – Solvency II – a highly unpopular move.

Resolving Solvency II

Segars is firm in her opposition, calling it the “number one” risk that pension funds face. She said: “Whilst I think we have done a lot of [lobbying] work this year on this directive, there is still more to do.”

She is hopeful that the measure may yet be kicked into the long grass – not least because any new initiatives must launch in the next six months or so if they are to get through the EU’s lengthy legislative processes before the current Parliament and Commission reach the end of their terms in 2014.

She said: “The change of Commissioners could potentially change the direction of what will happen. [Internal Market Commissioner Michel] Barnier has personally associated himself with this.”

Barnier wants a draft directive this summer, and for now, the EU’s legislative machinery is grinding on regardless.

Late last year the European Insurance and Occupational Pensions Authority, the EU regulator, asked pension funds to take part in an impact study. Eiopa chairman Gabriel Bernardino issued a plea to UK funds at the NAPF conference in October for data to do his job.

Segars said: “It’s helpful that Bernardino and his chief executive, Carlos Montalvo Rebuelta, have said there needs to be a huge amount more analysis on this.

I spoke at a conference in Frankfurt in November, and I found myself in the midst of a minor spat between the representatives of the Commission and Eiopa over this.

“It seems unbelievable that to decide on the insurance solvency standards the EU has needed 10 years, but the Commission thinks it can push ahead on pensions in this limited time frame.”

Segars said PensionsEurope had forged cross-industry alliances against the measure, including support from EU trade associations for fund managers, private equity and business in general.

She added there were signs the coalition of governments opposing the measure – the UK, Netherlands, Ireland and Germany – was increasingly hopeful of getting the extra recruits it needs to block the measure in the Council of Ministers, the EU’s gathering of national governments.

Segars said: “UK MEPs understand the issues well, and other countries too. This is an issue which disproportionately affects a small number of member states with defined benefit pensions. In European politics there is a lot of horse-trading and so on – but one problem we have is, some of the eurozone countries have bigger fish to fry right now.”

Back at the ranch

Meanwhile, back in the UK, the NAPF has never been busier. The organisation, based on Cheapside, London, employs 37 people and has been through some personnel changes recently.

Dan Torjussen-Proctor left the role of head of business development in December and the association is “considering the structure of the role before starting the search for a replacement”, according to a spokesman.

But the NAPF also recruited a head of investment policy this month, the former F&C executive Helen Roberts, whose remit will be to help improve pension funds’ understanding of the more complex parts of the financial world.

It has also increased its membership fees this year, raising grumbles from some fund managers members. But Segars points out that 95% of members at the association’s AGM voted for the changes.

She said: “The NAPF needs to adapt to the growing importance of pensions, and to put itself on a more sustainable footing. We offer important services to our members and we have had some big policy wins over the years.

If we are to continue to represent our members effectively, we need to have adequate resources in place. The NAPF still offers great value for money.”

Its lobbying work does appear to bear fruit, and the industry now receives the most sympathetic hearing in government that it has had in years. In November’s autumn statement, the Chancellor George Osborne bowed to demands for a second look at the discount rates used to value pension liabilities.

These have been driven down along with interest rates, which is at least partially due to the government’s quantitative easing programme.

Segars said this was a helpful debate to have. She said: “We are very pleased that the government will consult on this. We have been talking about the consequences of QE for a year or more; we think it has increased pension deficits by £90bn.

I think the impact is now recognised, by the government, by the Bank of England and the Pensions Regulator.”

Perhaps surprisingly, some in the industry – particularly actuaries – criticised the NAPF’s call for a temporary relaxation of discount rates. Segars said she could see why some people were cautious about “making the numbers up as you go along”.

She argued however: “We are not saying for one minute that we want funds and scheme sponsors to shed their responsibilities to properly fund pensions. It’s about striking a balance.”

• PensionsEurope: the new name in Brussels

PensionsEurope is a name so new it does not even have a website yet. Its predecessor European Federation for Retirement Provision, or EFRP, voted to change its name and elect Segars as chairman last November.

It is a pan-European body made up of 28 national associations, but a quick look at the statistics prepared for the organisation’s annual report shows the dominance of the UK, the Netherlands and Switzerland.

Of the €3 trillion managed by EFRP members at the end of 2010, the most recent figure available, 85% came from these three countries.

This is because pensions are provided by a number of different means throughout the continent.

Southern European countries such as Spain, Portugal and Greece have a history of generous state provision, so assets held in private-sector funds are tiny. Post-communist private systems in eastern Europe have yet to build up substantial pots.

PensionsEurope restricts itself to representing workplace pension funds, rather than insurance companies, even though the latter do provide pensions products of their own.

It has no members from some countries where pension funds are explicitly structured as insurance companies, such as Denmark.

In the past year, the body has lobbied not just on pension solvency rules but also on a raft of regulatory measures affecting funds and fund managers, such as the review of the Markets in Financial Instruments directive, rules on derivatives clearing and the financial transactions tax.

For more than a decade, the former EFRP was led by Belgian national Chris Verhaegen. She stepped down in December 2011 and has since been appointed the chairman of Eiopa’s consultative committee of pensions-industry representatives.

PensionsEurope’s executive director and secretary-general is now Matti Leppälä, formerly the international director of the Finnish pension fund association.